One of the more stupid statements made by motorists to cyclists is “you don’t pay tax”, sadly this is just not true. We all pay tax, as the old axiom has it: there are two things in life which are unavoidable, death and taxes. However, when challenged on this point, they go on to say that they alone pay something called “road tax”, and that the payment of this gives them a greater right to use the roads than anyone else. Again this is not true, here in the UK there is no such thing as “road tax”, there used to be a form of tax called the “Road Fund Licence”, but as I have pointed out elsewhere, this was abolished in 1936! We all pay for the roads through our taxes, so effectively we all pay “road tax”. Despite this, there is a widespread perception among motorists that they are somehow unfairly taxed, unlike those free loading cyclists and pedestrians who dare to use their roads.
So just how true is this perception that motorists are so unfairly taxed? Well in the financial year 2006-07 £28.43bn was raised from taxes on fuel and Vehicle Excise Duty (VED). In the same year around £8.78bn went toward maintenance and £11.91bn new road building, but that is not the whole story. The cost of policing the roads and the expense incurred by the judicial system has been estimated to be £3bn. Also, the cost to the NHS of injuries due to road accidents crashes, according to figures from collated by RoSPA, was £9.93bn. So the total cost to government was £33.62bn, meaning there was a short fall of £5.19bn, which had to be covered from other non-motoring related taxation.
In addition there is the cost to businesses and other drivers due to delays caused by congestion, estimated by those rampant greens, the Confederation of British Industry (CBI), to be about £19.1bn.
Even this does not cover the whole cost of motoring to the nation as a whole, there are a large raft of hidden costs borne by all UK tax payers, these include –
- Noise pollution: in the form of lowered house prices, spoilt semi-natural areas, ill-health and disturbed sleep, estimated to cost £3.1bn. One case study was based on over 3500 property sales in Glasgow, suggested that property prices were depressed by 0.20% for each decibel increase in road noise. (also see Roads: traffic noise)
- Air pollution (not including CO2): estimated to be between £8.5 billion and £20.2 billion a year and this is likely to be an under-estimate! [Update: A conservative estimate for one type of air pollution (particulates) is that it reduces average life expectancy in the UK by around six months, worth £16 billion a year. DEFRA 2015] When looking at the costs associated with global warming, the figures are more difficult to pin down, but have the potential to dwarf our entire economic system. Transport contributes about 23% of UK domestic carbon dioxide (CO2) emissions and road transport is responsible for 93% of this.
- Water pollution: in the form of run-off into rivers and drainage of leaking oil, break fluid, exhaust and soot from vehicles, rubber particulates from tyres and salt used in winter. Again estimated costs are uncertain, but are somewhere between £1bn and £16bn per year.
- Costs to health due to lack of exercise: the British population is one of the fattest in Europe. The direct cost of obesity to the NHS is £0.5bn per year, the indirect health impacts of physical inactivity, estimated to be £10.7 billion per annum, and on top of that the indirect cost to the UK economy is at least £2bn per year.
- Insurance: Car insurance is a competitive business. Figures released by the Association of British Insurers show that the payouts to road users were not covered by their premiums. The average shortfall for the five years from 1988 to 1992 was £626 million per year. In other words, insurance companies are charging more on other kinds of insurance to subsidise motorists.
- The cost of repairing pavements damaged by illegal parking: this has been estimated to cost in the region of £234m a year and that does not include the cost of policing, installing bollards and other devices to stop vehicles parking illegally or the cost of compensation claims for trips and falls caused by this damage.
The simple inconvenient fact is that it is 18% cheaper to run a car now than twenty years ago. This shows that “the motorist”, far from being unfairly taxed, is being heavily subsidised by the non-motoring tax payers. So it is motorists that are the free loaders on Britain’s roads, not the long suffering cyclists and pedestrians.
Now I really must get back to filling out my tax return, if only I could get a rebate for not owning a car …
Saturday, 12th, March 2016 at 09:59
Creative discussion – I was fascinated by the analysis , Does someone know if I would be able to get a blank IRS 1040-A copy to fill out ?
Saturday, 26th, November 2011 at 12:18
“In other words, insurance companies are charging more on other kinds of insurance to subsidise motorists.”
Other types of insurance are equally price sensitive, so they’d be “robbing Peter to pay Paul”.
The “subsidy” comes from investment income.
Monday, 29th, September 2014 at 22:53
Insurance may be something of a lost leader ultimately creating the conditions for use and securing value of currencies. RAC used to be owned by Aviva who then sold to Carlyle Group. Fitting because they also own Haliburton so they have all the vertical stack covered, from bomb places to control oil supplies and making sure drivers keep on driving to then buy the end product. Green Flag is another company whose parent owns also car dealerships, insurance and probably more.
Monday, 15th, August 2011 at 15:23
Excellent post.
@William.
I think you’ve missed the point a bit here. Kim isn’t talking about doing away with ambulances or fire engines. I’m sure even the most ardent pro-bike campaigners would allow for emergency services to retain use of fast and powerful cars. But all that horse power/fuel is often unnecessary.
It’s not bike v car, but rather commonsensical use of the right tool for the right job. If you need to drop kids off than go in the opposite direction for ten miles all in one morning – use a car. It’s not about enforcing guilt but increasing the awareness of how the car is very often (NOT always) overkill.
Saturday, 14th, May 2011 at 06:56
We all pay taxes. And it is our right as tax payers to have information about our tax history or assessments.
Tuesday, 8th, February 2011 at 15:09
I am a cyclist (cycle to work daily as well as for fitness) but this is the utterly biased load of bo***cks and is just as bad as the motoring complaining that they pay ‘road tax’.
Will RoSPA provide a balanced view? their income is dependant on overstating the cost of accidents etc… of how about the CBI? naturally they will also complain that the roads are conjested. Maybe we should send our deliveries by bicycle? or how about a pedal powered ambulance? or maybe you want to on holiday in some remote part of scotland on your bicycle? with your family?
Just imagine a society with out the car or lorry. We would be stepping back in to the 3rd world.
Tuesday, 8th, February 2011 at 15:24
William, would you care to provide a few figures to back up you argument?
I wasn’t suggesting that there should be no motor vehicles on the roads, merely showing that the cost of motoring is carried by the whole population not just those who drive.
Yes, I have taken holidays in some remote part of Scotland on my bicycle, and very pleasant it was too! I would suggest that you should try doing the same.
Having visited several “3rd world” countries I can assure you that they do have cars and lorries, they also have far higher death rates on the roads, partly due to poor infrastructure, but many due to the attitudes of drivers.
Tuesday, 8th, February 2011 at 15:52
Figures for which argument?
It does not take a genius to work out that if we did not have cars/vans journeys to hospital in some form of ambulance would take longer, or that if my work place was 5 miles away from my child’s school both of which are 3 miles away from my home, the only way to get the kids to school and me to work is to drive (in some cases a bus may be possible, but there will be many cases where it will not be possible).
The article fails to point out the many benefits that the car provides to society namely rapid, affordable, flexible transport. Many people would not be able to work if they did not have a car, I can not put a figure on it but just because a figure does not exist does not mean that the benefit does not exist. (we can try to calculate figures, lets say that 1/2 the UK population has a job (30 million people), and that 10% of those people need a car to reach their job (3 million people), average salary £25k, tax on this salary £5k: £5k*3 million = £15 billion and I’d say that figure is pretty conservative)
I agree that the cost of motoring is carried by the whole population but so is the benefit.
As for a holiday in scotland, if you have kids it just is not practical, there is also the small matter of getting there (some places will be near a station, many will not)
Presumably when you visited the 3rd world countries you went there by bicycle? or did you polite the atmosphere with CO2, NO2 and noise?
The article makes no attempt to be balanced. I agree that motorists can be arse***les (I have the scars to prove it) but cyclists can be just as bad and need to get off their moral high horse if we are to have a rational debate. Otherwise we will just be talking to ourselves, which is a bit pointless.
Tuesday, 4th, January 2011 at 18:05
You forgot to include the rental value of the space occupied by a motor car. A parked car must have at least 3′ of space in front and behind (so a double buggy can cross the road) it is a quite considerable amount of space. My road is 24′ wide and with cars parked both sides it is effectively a single track road, that means each parked car is taking up about 13×8 sqft. If we cost that at £10 per sqft per annum, that gives a price of £1,040
Plus the cost of lighting it all night, which should surely be added in the rent.
Tuesday, 4th, January 2011 at 18:10
I hadn’t though about it that way, but then where I am there are charges for on street parking.
Saturday, 27th, March 2010 at 18:38
I think I’m missing something here:
Tax income: £28.43bn
less:
Road costs: £8.78bn
Policing: £3bn
NHS: £9.93bn
Total cost: £21.71bn not £33.62bn.
Can you explain where I’m going on?
Wednesday, 31st, March 2010 at 15:43
Sorry, I forgot to put in the figure for new road building (£11.91bn) have now corrected the post above.
Saturday, 13th, February 2010 at 18:43
Since writing this post I have found out that the Cabinet Office estimate the costs to society of poor air quality, ill-health and road accidents in urban areas alone to exceed £40bn! (See http://www.cabinetoffice.gov.uk/media/308292/urbantransportanalysis.pdf for more information)
But sadly I still see NO current Government policy or proposed policy which is even trying to reverse these trends.
Monday, 17th, January 2011 at 11:49
The Cabinet Office document has been archived:
http://webarchive.nationalarchives.gov.uk/20091111123012/http://www.cabinetoffice.gov.uk/media/308292/urbantransportanalysis.pdf
And while searching for it found this:
The wider costs of transport in English urban areas in 2009.
http://webarchive.nationalarchives.gov.uk/20091111123024/http://www.cabinetoffice.gov.uk/media/307739/wider-costs-transport.pdf
Monday, 17th, January 2011 at 11:53
Thanks Simon, that is really useful! However, there is sill NO current Government policy or proposed policy which is even trying to reverse these trends, if anything the current UK Government policy seems to be aimed at make them worse…
Thursday, 12th, November 2009 at 13:47
Weee, the £8.78bn is for the total expenditure on roads by central and local government for that year (2007/8). According to HM Treasury, £3.15bn was spent on “National roads” and £5.63bn on “Local roads”. So the £5.63bn has most likely been paid out of council tax.
The same report states: “The fact that it is 18% cheaper to run a car now than twenty years ago combined with increases in the real level of bus and rail fares over the same period, makes it more difficult to encourage modal shifts from cars to public transport. The basis of Government policy should be to reverse these trends”. Sadly I see NO Government policy which is even trying to reverse these trends.
Wednesday, 11th, November 2009 at 16:02
Verrrry interestink! Well done, you.
Wondering…isn’t there more to road maintenance? Not sure you’ve got the whole picture there – I thought central govt only maintains the motorway network and major regional routes, while local authorities have responsibility for everything less than motorway standard – paid for by our council tax. Is that included in your 8.78bn, or is that just the central-government share?
Thursday, 5th, November 2009 at 17:24
Thanks for the number crunching- it’s useful when I next get the ‘But we pay soooo much road tax’ from a British motorist
Wednesday, 28th, October 2009 at 17:30
Using the “road tax” dodge is like comparing people to nazi’s. It means you’ve lost the argument, and running out of respectable options, you grab some sand to throw in their eyes.
Thursday, 15th, September 2011 at 10:10
“Using the “road tax” dodge is like comparing people to nazi’s.”
I think it’s a much closer analogy. Nazis were not above killing anyone who they didn’t like. And clearly some motorists are quite capable of killing or attempting to kill those they don’t like.